The White House announced that President Obama will address the nation on jobs after Labor Day. I have a suggestion for where the President could find part of the answer: by setting loose the 30-gigawatt (GW) buildup of U.S. solar projects bogged down in late stage development. Here's the amazing part: he could do it without committing to spend a single additional federal dollar and the result would be net savings to the government through massive job creation and a wave of private investment in our nation's infrastructure.
Let me first describe the situation on the ground. Over the past few years, rapidly declining solar costs and state Renewable Portfolio Standards (RPS) programs, which require utilities to generate a percentage of power from renewable energy sources, have combined to create 30GW of solar projects in the later stages of development. That's enough solar to power about 6 million homes. To put that in perspective relative to other sources of electricity, solar has more megawatts in development than wind, coal, gas, or nuclear according to analysis by the American Public Power Association.
All those solar projects represent many tens of thousands of new construction jobs, plus a whole lot of engineering, finance, and service jobs as well. The only reason those projects and jobs aren't happening now is because they're held up by a gauntlet of permitting, interconnection and financing challenges. To set those jobs free, we need to do just three things:
1. Streamline environmental permitting.
2. Align interconnection policies with utility procurement plans.
3. And expand the pool of eligible investors in solar projects.
Environmental permitting is inefficient, rife with redundancy, agency overlap, and jurisdictional issues. Don't get me wrong. We absolutely need strong rules to protect our environment and critical species. However, we can still have strong protection for our environment while streamlining rules and guidelines to make permitting more efficient. Net impact of reducing regulation: less government waste, less industry waste, more jobs.
Interconnection is a pretty technical issue but what's needed is straightforward to understand. Interconnection refers to the process of connecting a generator to the electrical grid. Under the current system, interconnection is overseen by "independent system operators" who coordinate grid planning and decide who gets connected and when. Procurement – how utilities buy power – is overseen by utility commissions who determine whether the purchase complies with regulatory requirements. We need our political leaders to make it clear that interconnection should 'follow' utility procurement. Right now they're treated as two separate processes, which is kind of silly when you think about it. This results in ridiculous situations where interconnection is granted to a generating resource utilities don't want or interconnection is denied to a resource that the market deems important. Net impact of fixing interconnection: less government waste, less industry waste, more jobs.
The easiest thing President Obama can do is expand the pool of eligible investors in solar projects. None of the 30GW solar pipeline will be built if investment capital isn't allowed to flow into projects. To be clear, I'm talking about good projects with proven technology, strong credit, and attractive returns. These kinds of projects should be easy to finance, but they're not.
